Unlisted technology equipment financier Innovent

Unlisted technology equipment financier Innovent is looking for growth beyond South African borders on the back of growing demand from companies wanting to reduce the costs of owning technology hardware.

Innovent, which opened its doors eight years ago, provides finance to companies to buy and lease technology hardware, motor vehicles and telecoms equipment.

Zakhe Khuzwayo, chief operating officer of Innovent, said the company is expanding in the continent with its existing clients, but would use that opportunity to seek new business. Although he would not comment on which countries Innovent is eyeing, he expects to finalise two deals next year.

Innovent already has a subsidiary in Zimbabwe, which, according to Khuzwayo, is breaking even a year after it was opened, with the demand expected to soar in the coming years.

Khuzwayo said the business of leasing equipment rather than buying was helping companies' balance sheets to “look much more attractive”.

“Many companies do not want this type of infrastructure on their balance sheet. By leasing them, they don't have to worry about depreciation and other related accounting instruments. There are savings on audit fees for fixed assets - which are no longer on their books,” he said.

Although the equipment finance and rental market is a fast-growth area, there are still challenges with raising funds, he said. Innovent competes with some big listed local and international companies.

Innovent provides a guaranteed buy-back of the old assets and this residual lowers the effective interest rate, said Khuzwayo.

Innovent's clientele are in the medical sector, parastatals, retailers, small to medium-sized enterprises and universities.

Discovery is its first client and Innovent provides all the information and technology hardware to the company. Innovent recently became part of the medical aid's enterprise development programme. The benefits for this include receiving preferential payment rate. It also became part of a global non-profit organisation, called Endeavor, which, among other things, helped it to access potential clients.

Innovent expects to double its turnover this year as more companies are replacing their old stock. Innovent's previous annual growth was around 30% to 40%.

Khuzwayo said that, apart from the geographical expansion, Innovent would venture into the medical equipment industry. “There is growing demand for equipment such as radiology machines, and given our experience in leasing and financing, we are well positioned to add those to our portfolio,” he said.